Forgiving Mortgages, or Just Refinancing Them?

Rush was outraged today, saying that Obama is going to "Forgive" all mortgages - in other words, end them, let people stay in their houses for free without paying for them.

That's the headline on his site, and that's his initial comment.

But as he goes on, Obama's not doing that at all.

Our old buddy James Pethokoukis, who writes at Reuters and some other places, has discovered that one of the objectives Obama has with all these recess appointments is to -- brace yourself here -- essentially, when you strip it all away, if this happens, what Obama is planning on doing is essentially forgiving all mortgages.

There are some requirements. You have to be paying on your mortgage, you have to be three months current, but Obama is going to just wave a magic wand and allow people to refinance their mortgages, essentially cutting hundreds of dollars off of the monthly payment. This will cost $1.2 trillion and, as always, it is those of you who don't have a mortgage or who will not qualify for this plan who will be paying for it.

In other words, they still have to pay their mortgage, they just get to put more money toward principle and less toward interest. What's wrong with that?

Banks will still make money - they'll still make a lot of money! And better than that, they'll have people actually paying their home loans instead of not paying them and having to repossess them!

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